1.By adding a new definition to be appropriately inserted and to read:

""Resort fee"
means any mandatory charge or surcharge imposed by an operator, owner, or
representative thereof on a transient for the use of the transient
accommodation's property, services, or amenities."

2.By amending the definition of "fair
market rental value" to read:

""Fair market rental value"
means an amount equal
to [one-half] per cent of the
gross daily maintenance fees that are paid by the owner and are attributable to
the time share unit located in Hawaii.Gross daily maintenance fees include maintenance costs, operational
costs, insurance, repair costs, administrative costs, taxes, other than
transient accommodations taxes, resort fees, and other costs including payments
required for reserves or sinking funds.Amounts paid for optional goods and services such as food and beverage
services or beach chair or umbrella rentals shall be excluded from fair market
rental value."

3.By amending the definition of "gross
rental" or "gross rental proceeds" to read:

""Gross rental" or "gross
rental proceeds" means the gross [receipts,] sales or
gross charges collected from consumers, including but not limited to booking
fees, resort fees, cleaning fees, lodging fees, transient fees, or any other
fees collected, but does not include fees collected for ground transportation,
airfare, meals, excursions, tours, or other fees unrelated to the transient
accommodations,cash or
accrued, of the taxpayer received as compensation for the furnishing of
transient accommodations or entering into arrangements to furnish transient
accommodations and the value proceeding or accruing from the furnishing of [such]
the accommodations or entering into arrangements to furnish transient
accommodations without any deductions on account of the cost of property or
services sold, the cost of materials used, labor cost, [taxes,]
royalties, interest, discounts, or any other expenses whatsoever.Every taxpayer shall be presumed to be
dealing on a cash basis unless the taxpayer proves to the satisfaction of the
department of taxation that the taxpayer is dealing on an accrual basis and the
taxpayer's books are so kept, or unless the taxpayer employs or is required to
employ the accrual basis for the purposes of the tax imposed by chapter 237 for
any taxable year in which event the taxpayer shall report the taxpayer's gross
income for the purposes of this chapter on the accrual basis for the same period.

The words "gross rental" or "gross
rental proceeds" shall not be construed to include the amounts of taxes
imposed by chapter 237 or this chapter on operators of transient accommodations
or transient accommodations intermediaries and passed on, collected, and
received from the consumer as part of the receipts received as compensation for
the furnishing of transient accommodations[.] or entering into
arrangements to furnish transient accommodations.Where transient accommodations are furnished
through arrangements made by a [travel agency or tour packager] transient accommodations intermediary at noncommissionable negotiated
contract rates and the gross income is divided between the operator of
transient accommodations on the one hand and the [travel agency or tour packager] transient accommodations
intermediary on the other
hand, [gross rental or gross rental proceeds to the operator means only the
respective portion allocated or distributed to the operator,] the
tax imposed by this chapter shall apply to each operator and transient
accommodations intermediary with respect to that person's respective portion of
the proceeds,and no
more.For purposes of this definition,
where the operator maintains a schedule of rates for identifiable groups of
individuals, such as kamaainas, upon which the accommodations are leased, let,
or rented, gross rental or gross rental proceeds means the receipts collected
and received based upon the scheduled rates and recorded as receipts in its
books and records."

4.By amending the definition of "transient accommodations broker"
to read:

"(b)Every [operator] transient
accommodations intermediary who arranges transient accommodations at
noncommissioned negotiated contract rates and every operator shall pay to
the State the tax imposed by subsection (a), as provided in this chapter."

"§237D-4Certificate of registration.(a)Each operator or plan manager as a condition
precedent to engaging or continuing in the business of furnishing transient
accommodations or in business as a resort time share vacation plan,
shall register with the director the name and physical address of each
place of business within the State subject to this chapter.The operator or plan manager shall make a
one-time payment as follows:

(1)$5 for each
registration for transient accommodations consisting of one to five units;

(2)$15 for each
registration for transient accommodations consisting of six or more units; and

(3)$15 for each
resort time share vacation plan within the State;

upon receipt of which the director shall issue a
certificate of registration in [such] a form as the director
determines, attesting that the registration has been made.The registration shall not be transferable
and shall be valid only for the operator or plan manager in whose name it is
issued and for the transaction of business at the place designated
therein.Acquisition of additional
transient accommodation units after payment of the one-time fee shall not
result in additional fees.

(b)The registration,
or in lieu thereof a notice stating where the registration may be inspected and
examined, shall at all times be conspicuously displayed at the place for which
it is issued.The name, phone number,
and electronic mail address of the local contact shall at all times be
conspicuously displayed in the same place as the registration or the same place
as the notice stating where the registration may be inspected and examined.Failure to meet the requirements of this
subsection shall be unlawful.The
department may issue citations to any person who fails to conspicuously display
the registration or notice, or the local contact's name, phone number, or
electronic mail address as required by this subsection.A citation issued pursuant to this subsection
for each transient accommodation or resort time share vacation interest, plan,
or unit in violation of this subsection shall include a monetary fine of not
less than:

(1)$500 per day, for
a first violation for which a citation is issued;

(2)$1,000 per day,
for a second violation for which a citation is issued; and

(3)$5,000 per day,
for a third and any subsequent violation for which a citation is issued.

(c)Any advertisement,
including an online advertisement, for any transient accommodation or resort
time share vacation interest, plan, or unit shall conspicuously provide:

(1)The
registration identification number or an electronic link to the registration
identification number of the operator or plan manager issued pursuant to this
section; and

(2)The local contact's
name, phone number, and electronic mail address, provided that this paragraph
shall be considered satisfied if this information is provided to the transient
or occupant prior to the furnishing of the transient accommodation or resort
time share vacation unit.

(d)Failure to meet
the requirements of subsection (c) shall be unlawful.The department may issue citations to any
person, including operators, plan managers, and transient accommodations [brokers,]
intermediaries, who violates subsection (c).A citation issued pursuant to this subsection
for each transient accommodation or resort time share vacation interest, plan,
or unit in violation of subsection (c) shall include a monetary fine of not
less than:

(1)$500 per day, for
a first violation for which a citation is issued;

(2)$1,000 per day,
for a second violation for which a citation is issued; and

(3)$5,000 per day,
for a third and any subsequent violation for which a citation is issued.

(e)The registration
provided for by this section shall be effective until canceled in writing.Any application for the reissuance of a
previously canceled registration identification number shall be regarded as a
new registration application and shall be subject to the payment of the
one-time registration fee.The director
may revoke or cancel any license issued under this chapter for cause as
provided by rule under chapter 91.

(f)If the license
fee is paid, the department shall not refuse to issue a registration or revoke
or cancel a registration for the exercise of a privilege protected by the First
Amendment of the Constitution of the United States, or for the carrying on of
interstate or foreign commerce, or for any privilege the exercise of which,
under the Constitution and laws of the United States, cannot be restrained on
account of nonpayment of taxes, nor shall section 237D-14 be invoked to
restrain the exercise of such a privilege, or the carrying on of such commerce.

(g)Any person who
may lawfully be required by the State, and who is required by this chapter, to
register as a condition precedent to engaging or continuing in the business of
furnishing transient accommodations or as a plan manager subject to taxation
under this chapter, who engages or continues in the business without
registering in conformity with this chapter, shall be guilty of a
misdemeanor.Any director, president,
secretary, or treasurer of a corporation who permits, aids, or abets [such]
the corporation to engage or continue in business without registering in
conformity with this chapter, shall likewise be guilty of a misdemeanor.The penalty for the misdemeanors shall be the
same as that prescribed by section 231-35 for individuals, corporations, or
officers of corporations, as the case may be, for violation of that section.

(h)Any monetary fine
assessed under this section shall be due and payable thirty days after issuance
of the citation, subject to appeal rights provided under this subsection.Citations may be appealed to the director of
taxation or the director's designee.

(i)Each transient accommodations intermediary,
as a condition precedent to entering into an arrangement to furnish transient
accommodations at noncommissioned negotiated contract rates, shall register
with the director.The transient
accommodations intermediary shall provide the physical address of each
transient accommodation for which it will enter into an arrangement to furnish
transient accommodations at noncommissioned negotiated contract rates; provided
that the transient accommodations intermediary has obtained prior written
consent from the operator or plan manager to disclose the address of the
transient accommodation.The transient accommodations
intermediary shall make a one-time payment of $15 to register with the
director.Upon receipt of the
registration payment, the director shall issue a certificate of registration to
the transient accommodations intermediary in a form as the director determines,
attesting that the registration has been made.The registration shall not be transferable and shall be valid only for
the transient accommodations intermediary in whose name it is issued."

"(a)On or before the twentieth day of each
calendar month, every [operator taxable, or plan manager] taxpayer
liable under this chapter during the preceding calendar month shall file a sworn
return with the director in [such] a form as the director shall
prescribe together with a remittance for the amount of the tax in the form
required by section 237D-6.5.Sections
237-30 and 237-32 shall apply to returns and penalties made under this chapter
to the same extent as if the sections were set forth specifically in this
section."

"§237D-7Annual return.On or before the twentieth day of the fourth
month following the close of the taxable year, every person who has become
liable for the payment of the taxes under this chapter during the preceding tax
year shall file a return summarizing that person's liability under this chapter
for the year, in [such] a form as the director prescribes.The [operator or plan manager] taxpayer
shall transmit with the return a remittance covering the residue of the tax
chargeable to the [operator or plan manager,] taxpayer, if any,
to the office of the appropriate state district tax assessor designated in
section 237D-8.The return shall be
signed by the taxpayer, if made by an individual, or by the president,
vice-president, secretary, or treasurer of a corporation, if made on behalf of a
corporation.If made on behalf of a partnership,
firm, society, unincorporated association, group, hui, joint adventure, joint
stock company, corporation, trust estate, decedent's estate, trust, or other
entity, any individual delegated by the entity shall sign the same on behalf of
the taxpayer.If for any reason it is
not practicable for the individual taxpayer to sign the return, it may be done
by any duly authorized agent.The
department, for good cause shown, may extend the time for making the return on
the application of any taxpayer and grant [such] reasonable additional
time within which to make the return as the department may deem advisable.

Section 232-2 applies to the annual
return, but not to a monthly return."

"(a)If any [operator or plan manager] taxpayer
fails to make a return as required by this chapter, the director shall make an
estimate of the tax liability of the [operator or plan manager] taxpayer
from any information the director obtains, and according to the estimate so
made, assess the taxes, interest, and penalty due the State from the [operator
or plan manager,] taxpayer, give notice of the assessment to the [operator
or plan manager,] taxpayer, and make demand upon the [operator or
plan manager] taxpayer for payment.The assessment shall be presumed to be correct until and unless, upon an
appeal duly taken as provided in section 237D-11, the contrary shall be clearly
proved by the person assessed, and the burden of proof upon [such]
appeal shall be upon the person assessed to disprove the correctness of
assessment."

"§237D-10Overpayment; refunds.Upon application by [an operator or plan
manager,] a taxpayer, if the director determines that any tax,
interest, or penalty has been paid more than once, or has been erroneously or
illegally collected or computed, the tax, interest, or penalty shall be
credited by the director on any taxes then due from the [operator or plan
manager] taxpayer under this chapter.The director shall refund the balance to the
[operator or plan manager] taxpayer or the [operator's or plan
manager's] taxpayer's successors, administrators, executors, or
assigns in accordance with section 231-23.No credit or refund shall be allowed for any tax imposed by this
chapter, unless a claim for [such] the credit or refund is filed
as follows:

(1)If an annual
return is timely filed, or is filed within three years after the date
prescribed for filing the annual return, then the credit or refund shall be
claimed within three years after the date the annual return was filed or the
date prescribed for filing the annual return, whichever is later.

(2)If an annual
return is not filed, or is filed more than three years after the date
prescribed for filing the annual return, a claim for credit or refund shall be
filed within:

(A)Three years after
the payment of the tax; or

(B)Three years after
the date prescribed for the filing of the annual return,

whichever is later.

Paragraphs (1) and (2) are mutually exclusive.The preceding limitation shall not apply to a
credit or refund pursuant to an appeal, provided for in section 237D-11.

As to all tax payments for which a
refund or credit is not authorized by this section (including, without
prejudice to the generality of the foregoing, cases of unconstitutionality),
the remedies provided by appeal or by section 40-35 are exclusive."

"§237D-12Records to be kept;
examination.Every [operator and
plan manager] taxpayer shall keep in the English language within the
State, and preserve for a period of three years, suitable records of gross
rental, gross rental proceeds, or fair market rental value relating to the
business taxed under this chapter, and [such] any other books,
records of account, and invoices [as] that may be required by the
department, and all such books, records, and invoices shall be open for
examination at any time by the department or the Multistate Tax Commission
pursuant to chapter 255, or the authorized representative thereof."

"§237D-15Application of tax.(a)The tax imposed by this chapter shall be in
addition to any other taxes imposed by any other laws of the State, except as
otherwise specifically provided in this chapter; provided that if it be held by
any court of competent jurisdiction that the tax imposed by this chapter may
not legally be imposed in addition to any other tax or taxes imposed by any
other law or laws with respect to the same property or the use thereof, then
this chapter shall be deemed not to apply to such property and the use thereof
under the specific circumstances, but the other laws shall be given full effect
with respect to such property and use.

(b)In order to determine if the tax under this
chapter is to be levied, assessed, and collected upon transient accommodations
the following presumptions shall control.

(1)If a person lets a transient accommodation for
less than one hundred eighty consecutive days, it shall be presumed that the
accommodation furnished is for a transient purpose.

(2)If a person lets a transient accommodation for
one hundred eighty days or more, there is no presumption one way or another as
to the purpose for which the accommodation is furnished.

The
operator shall have the burden of proving to the department whether an
accommodation is not being furnished for a transient purpose.If the department is satisfied that an
accommodation is not furnished for a transient purpose, then the department
shall not levy any tax under this chapter.The department shall adopt rules to implement this section.

(c)Except as otherwise provided, this chapter
shall apply to a transient accommodations intermediary who furnishes or enters
into an agreement to furnish transient accommodations at noncommissioned
negotiated contract rates in the same manner as this chapter applies to an
operator."

SECTION 10.Statutory material to be repealed is
bracketed and stricken.New statutory
material is underscored.

SECTION 11.This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2018.

Imposes
the transient accommodations tax on resort fees that are calculated separately
from the advertised transient accommodation's rate.Clarifies that the transient accommodations
tax shall be calculated based on the gross rental.Amends the formula for the amount of
transient accommodations tax to be collected from time shares by increasing the
base on which time share occupancy is taxed from one-half of the gross daily
maintenance fees paid by the owner and are attributable to the time share unit
to an unspecified percentage.Specifies
that the transient accommodations tax is to be collected from transient
accommodations intermediaries who arrange transient accommodations at
noncommissioned negotiated contract rates in the same manner as transient
accommodations operators.Applies to
taxable years beginning after 12/31/2018.(SD1)

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.